Earnings Analysis for OLN: Detailed Insight
Revenue Analysis
Total and Operating Revenue: Over the 6 quarters, the Total Revenue presented a minor oscillation, ranging from $1,614.6M to $1,845.3M. The most significant surge was observed in Q1 2023 when the Total Revenue reached $1,845.3M from the previous quarter’s $1,671.4M.
Gross Profit: Corresponding with the Total Revenue, the Gross Profit generally increased from $207.3M in Q1 2024 to $402.6M in Q1 2023. This indicates an improvement in the margin over time.
Cost Management
Cost of Revenue: Cost of Revenue essentially remained steady around $1.4B, reflecting consistent production costs across the observed quarters. Operating Expense lightly fluctuated, showing some variability in the company’s operational spending.
Total Expenses: Displayed a range from $1.463B to $1.543B, suggesting overall controlled expenditure despite revenue variations.
Profitability Analysis
EBITDA: EBITDA witnessed a marked increase from $234.6M in Q1 2024 to a peak of $374.3M in Q1 2023, displaying periods of strong operational efficiency and profitability.
Operating Income: Increased from $112.4M in Q1 2024 to $297M in Q1 2023, supporting the view of operational strengthening.
Pretax and Net Income: Resultant Pretax Income rose progressively from $60.3M in Q1 2024 to $194.8M in Q1 2023, with corresponding Net Income aligning closely with these figures. The Net Income demonstrated growth, affirming profitability improvement.
Cash Flow Indicators
Reconciled Depreciation: Remained relatively stable within the range of around $128.5M to $137.1M, indicating consistent capital expenditure on fixed assets.
Interest Expense: Showed incremental rise, partly reflecting possibly increased borrowing, averaging about $45M across the periods.
Taxation
Tax Rate: Exhibited minor variations between 0.185 to 0.254, indicating changing tax obligations.
Tax Provision: Fluctuated in line with operational profits, with higher pretax income incurring bigger tax outlays, notably increasing from $12.5M in Q1 2024 to $40.8M in Q1 2023.
Shareholder Metrics
Diluted and Basic EPS: Displayed improvement over time from $0.4 and $0.41 in Q1 2024, respectively, to $1.16 and $1.19 in Q1 2023. This reflects an increased earnings per share, beneficial for shareholders.
Average Shares: There was an increase in both diluted and basic average shares, underscoring a rise from 121.9M and 119.9M in Q1 2024 to 134.4M and 131M in Q1 2023 respectively, potentially diluting individual share value.
Net Income Available to Common Stockholders: Consistently aligned with the overall net income indicating a stable distribution to stockholders.
Conclusion
OLN has shown a robust performance marked by increasing revenue and gross profit levels alongside effective cost management. The strategic management practices have led to enhanced profitability and operational efficiency. It is advisable for OLN to continue optimizing its operations and possibly curtail increased indebtedness, as cautioned by rising interest expenses.